Australian Dollar Technical Price Outlook: Near-term Trade Levels
- Australian Dollar technical trade level update – Daily & Intraday Charts
- AUD/USD breaches multi-month uptrend resistance- breakout underway
- Constructive while above weekly open- Initial resistance objectives at 7573
The Australian Dollar has surged more than 1.3% against the US Dollar since the start of the week with a breakout in AUD/USD now probing fresh multi-year highs. These are the updated targets and invalidation levels that matter on the AUD/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Aussie setup and more.
Australian Dollar Price Chart – AUD/USD Daily
Chart Prepared by Michael Boutros, Technical Strategist; AUD/USD on Tradingview
Technical Outlook: In last month’s Australian Dollar Price Outlook we noted that AUD/USD had stalled into uptrend resistance with the immediate rally vulnerable into the September yearly highs. A breach to multi-year highs into the December open has fueled a larger technical breakout with Aussie surging through uptrend resistance – these breakouts can often mark accelerated rallies with daily & intraday RSI now breaking into overbought territory. Momentum is on the side of the bulls for now.
Initial daily resistance objectives eyed at the 78.6% Fibonacci retracement of the 2018 decline at 7573 and the 75% parallel / 38.2% of the 2011 decline at 7635- look for price inflection there IF reached with a breach / close above needed to keep the long-bias viable towards 7836. Daily support / near-term bullish invalidation now raised to the November opening-range highs / December open at 7340- weakness beyond this threshold would risk a larger correction towards the lower parallel into the close of the year.
Australian Dollar Price Chart – AUD/USD 120min
Notes: A closer look at Aussie price action highlights the AUD/USD breakout above median-line resistance this week with the advance now probing the 75-handle. Weekly open support at 7430 backed by the September high-day close / weekly opening-range low at 7371. Ultimately a close below 7340 would be needed to suggest a more significant correction is underway.
Bottom line: The Australian Dollar rally has marked a technical breakout above uptrend resistance. From a trading standpoint, the trade remains constructive while above the weekly open – be on the lookout for a reaction on a stretch towards the upper parallels / Fibonacci resistance for guidance IF reached. Use caution here – the advance is mature and the risk rises for a washout as price approaches pitchfork resistance. Review my latest Australian Dollar Weekly Price Outlook for a closer look at the longer-term AUD/USD technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Australian Dollar Trader Sentiment – AUD/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-short AUD/USD - the ratio stands at -2.37 (29.69% of traders are long) – typically bullish reading
- Long positions are 7.71% lower than yesterday and 4.14% lower from last week
- Short positions are2.91% higher than yesterday and 9.47% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bullish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 2% | 3% | 2% |
| Weekly | 29% | -46% | 0% |
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- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
